South Korean biotechnology firm Nature Cell said Tuesday that its stem cell therapy for Alzheimer’s disease has been formally approved for use at Fukuoka Trinity Clinic, one of its partner hospitals in Japan.

The Seoul-based biotech firm says this is the first time for a stem cell therapy for treating Alzheimer’s to be commercialized anywhere in the world.

Despite the news, shares of Nature Cell early Tuesday continued a plunge initiated by recent news that the Korean Drug Ministry had rejected Nature Cell’s request for conditional approval for a separate osteoarthritis stem cell drug.

Shares of Nature Cell initially fell about 18 percent in morning trading hours, but later recovered to close at 43,700 won ($40.90) on Tuesday, up 0.23 percent from the previous day.

According to Nature Cell, Kyushu’s conditional approval review board for regenerative medicine has approved Fukuoka Trinity Clinic’s request to begin offering Astro Stem to interested patients. The decision was also delivered to Japan’s Ministry of Health, Labor and Welfare.

As a result, the hospital -- a partner of the Biostar Research Institute jointly run by Nature Cell and R Bio -- will be able to start offering the firm’s stem cell therapies to patients within this month, it said.

In Japan, stem cell therapies are not considered drugs, but fall under therapeutic technology.

To begin providing stem cell therapies, a hospital must obtain the approval of a board of regenerative medicine specialists who review the drugs’ efficacy and safety, as well as patient risks and benefits.

Once approval is granted, it is delivered to the Japanese Drug Ministry for recordkeeping. Then, the hospital can begin commercially offering the stem cell treatments to patients at the facility.

Stem cells -- progenitor cells able to develop into various types of tissue -- are viewed as key to the field of regenerative medicine, which helps the body repair itself.

Stem cell therapies are engineered by extracting stem cells from the patient’s tissue, incubating the cells, then administering them intravenously to the patient.

So far, Nature Cell has developed stem cell therapies including Joint Stem, targeting osteoarthritis, and Astro Stem for Alzheimer’s disease, both of which have concluded phase 2 clinical trials in the US.

In Korea, the drugmaker finished phase 2 trials for Joint Stem and sought to obtain sales approval from the Korean Ministry of Food and Drug Safety, based on a fast-track approval procedures that allows drugs targeting rare or severe irreversible diseases to be commercialized early, before conducting phase 3 trials.

However, the Korean drug regulator rejected Nature Cell’s submission, citing insufficient clinical evidence -- the firm had tested out its drug on only 13 patients in the US -- to prove the drug’s efficacy and safety.

By Sohn Ji-young (jys@heraldcorp.com)